302 U.S. 292 (1937), 34, Worcester County Trust Co. v. Riley

Docket NºNo. 34
Citation302 U.S. 292, 58 S.Ct. 185, 82 L.Ed. 268
Party NameWorcester County Trust Co. v. Riley
Case DateDecember 06, 1937
CourtUnited States Supreme Court

Page 292

302 U.S. 292 (1937)

58 S.Ct. 185, 82 L.Ed. 268

Worcester County Trust Co.



No. 34

United States Supreme Court

Dec. 6, 1937

Argued November 15, 16, 1937




1. State taxing officials seeking through judicial proceedings to assess a succession tax on intangible property in pursuance of laws of their State, which impose the tax only if the deceased was domiciled therein at death, cannot constitutionally be interpleaded in a federal court with tax officials of another State likewise claiming the domicile and the right to tax, in order that the federal court may determine which State is in fact domiciliary and enjoin taxation in the other State, for the purpose of avoiding double taxation. P. 296.

Such a suit is in effect against the State, forbidden by the Eleventh Amendment.

A bill of interpleader, brought by an executor against tax officials of California and of Massachusetts, alleged that the California officials had determined and were asserting that the decedent at death, was domiciled in that State, and were threatening to assess and collect under California laws, applicable in case of local domicile, a death tax upon all his intangibles, which would be in excess of any tax that would be due if the domicile was Massachusetts, and that the Massachusetts official, in behalf of his State, was asserting that the domicile was in Massachusetts and the estate taxable there upon all the intangibles; that it was impossible in law and in fact for decedent to have been domiciled in both States at the time of his death, or for his estate to be subject to death taxes in both States as asserted, and that attempted collection was a threatened deprivation of property without due process of law and denial of equal protection of the laws. The bill prayed that the court order the respondent officials of the two States to interplead their respective claims for the tax; that the court determine the domicile of decedent, the amount of the tax, and the person or persons to whom it was payable, and that respondents be enjoined from any other proceedings to collect it. Held that, on objection of the California respondents, the suit was properly dismissed as, in substance, a suit against the State.

Page 293

2. Under California statutes, inheritance taxes are assessed by judicial proceedings resulting, after full opportunity for presentation of evidence and a hearing, in a judgment which is reviewable on appeal by the state courts, and by this Court if it involves any denial of federal right. P. 298.

3. Conflicting decisions of the same issue of fact do not necessarily imply judicial error. P. 299.

4. Neither the Fourteenth Amendment nor the full faith and credit clause requires uniformity in the decisions of the courts of different States as to the place of domicile where the exertion of state power is dependent upon domicile. P. 299.

5. City Bank Former Trust Co. v. Schnader, 291 U.S. 24, distinguished. P. 300.

89 F.2d 59 affirmed.

Certiorari, 301 U.S. 678, to review the reversal of a decree granting a temporary injunction in an interpleader suit, 14 F.Supp. 754.

Page 294

STONE, J., lead opinion

MR. JUSTICE STONE delivered the opinion of the Court.

The question for decision is whether the Federal Interpleader Act, § 24(26) of the Judicial Code as amended January 20, 1936, c. 13, § 1, 49 Stat. 1096, may be availed of for the litigation and final disposition of the rival claims of two states, each asserting through its officers the right to recover death taxes on the ground that decedent was last domiciled within its boundaries.

[58 S.Ct. 186] Petitioner is the duly qualified executor named in the last will of decedent, which has been probated in Massachusetts. Ancillary administration of the estate has been granted in California. Petitioner brought the present suit in the District Court for Massachusetts, joining as defendants Commissioner of Corporations and Taxation of the Commonwealth of Massachusetts, and respondents, officers of the State of California, all charged with the duty of administering death tax statutes of their respective states. The bill of complaint is founded upon the Interpleader Act, and seeks the remedy which it affords.

Page 295

Section 24(26) confers jurisdiction on the District Courts in suits of interpleader or in the nature of interpleader, by plaintiffs who are under an obligation to the amount of $500 or more, the benefits of which are demanded by two or more adverse claimants who are citizens of different states. By subsection 26(a),

Such a suit in equity may be entertained although the titles or claims of the conflicting claimants do not have a common origin, or are not identical, but are adverse to and independent of one another.

And, by subsection 26(a)(ii) and (d), complainant, upon satisfying jurisdictional requirements of the act and depositing the money or property in the registry of the court, or upon giving a prescribed bond, is entitled to a decree discharging him from further liability and enjoining the claimants from further proceedings in other courts to recover the sum claimed.

The bill of complaint alleges that decedent left bank deposits and other intangibles in California and Massachusetts, a substantial part of which has come into the possession or custody of petitioner; that respondents, the California taxing officials, have determined and assert that decedent, at death, was domiciled in California, and that, under the law of that state, his estate is subject to death taxes upon all his intangibles; that...

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